Qantas Airways says it is on track to reduce debt by A$1 billion ($798.1 million) in its 2015 financial year, as part of its transformation programme.
In an investor presentation, the Oneworld carrier says all targets set have so far been met or exceeded. The airline's A$2 billion cost-cutting programme will deliver more than A$875 million in savings by June, with three quarters of its planned 5,000 redundancies completed by the same time.
It adds that A$600 million in cost cuts are already in the implementation phase.
The airline also expects its credit profile to reach its target two years ahead of its initial time frame, and to preserve its investment grade.
“With the A$1 billion debt reduction, and improvement in maintainable earnings, the group expects to be within target range [BBB and BBB-] by end FY15,” it adds.
Qantas says the group is also well positioned to capitalise on the return to a more favourable operating environment. This is helped by an expected A$550 million in fuel cost reduction for the year, and with the lower Australian dollar a boon for Qantas International.
The airline is also seeing a moderation in domestic and international capacities, following a prolonged period of above-average growth.
Qantas recorded an underlying pre-tax loss of A$646 million ($603 million) for its fiscal 2014. It made a strong return to profit for the first half of 2015 with an A$367 million underlying profit before tax.